Anyone ever trade vehicles with someone?

Sep 2, 2012 2:40 PM

I have a car which I'm possibly going to trade for another vehicle. Since me an the other person are basically assessing the value of our items equally, and no money exchanges hands, I'm not sure what to do about the price on a Bill of Sale. Technically, it's $0. But, the state (NY, in this case) will want to tax us on this.

Would they just use a KBB value? Should we use a realistic value for each Bill of Sale and hope to get taxed off that? Anyone ever dont this, or have any insight? I'm not happy about paying taxes on what's an even trade, but I know I'll have to.. but would prefer paying the least possible without being fraudulent :-)

Top Answers

I am in PA and there is a similar form here when a vehicle is sold/gifted for less than the market value. Years ago if you filled out the form, you did not pay tax here but I have no recent knowledge in PA or any at all for NY.

I would just ask the NY DMV, myself. In other places I've lived, there's provision for just this situation, and I don't see why they wouldn't also have some written procedure. You are neither gaining nor losing in this, no real profit accrues to either of you, and I suspect that there may be no sales tax due at all (but IANAL).

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I would just ask the NY DMV, myself. In other places I've lived, there's provision for just this situation, and I don't see why they wouldn't also have some written procedure. You are neither gaining nor losing in this, no real profit accrues to either of you, and I suspect that there may be no sales tax due at all (but IANAL).

@shrdlu: I'd certainly ask them. But, this may actually happen tomorrow when they DMV is closed :-) I'd also not totally trust them, since my experience is that gov't agencies have their own best interests in mind, not mine. They want to make money, I want to save money :-) But, there doesn't seem to be any "trade" paperwork, or checkbox on anything I'm finding. Only that you can gift it, if it's a relative.

I am in PA and there is a similar form here when a vehicle is sold/gifted for less than the market value. Years ago if you filled out the form, you did not pay tax here but I have no recent knowledge in PA or any at all for NY.

@smallbigtall: Then they may go to the KBB, figuring we're just trying to get around paying any taxes.

@eeekdageek: That's what I'm thinking. Just put something reasonable as the value.

@pattiq: DTF-802 has a spot to say what the value of the traded item is. It looks like one for value of item you're trading and one for the item you're trading for. But, those values would have to match a bill of sale value, I'm sure.

It's the government. They want your money.
I mean, their money.
There are two legal transactions involved here. You to him, he to you.
Sales tax, etc is involved in each of both transactions.
If you don't tell the DMV droid you're buying a POS fixer upper, and you smarmily say the car is only worth a dollar, she has to auto charge you low blue book.

BTW, this is what killed the barter system and actual swap meets in Kalifornia.
We used to have craigslist kinda things, where you could post "I have a "X" and I want a "Y"; and sometimes someone with a "Z" could get in the middle and everybody would be happy.
Aholes invaded the "free" ones, so then came the paid access "clubs.
Well, the rat wingers weren't happy. "Unfair competition!" they said.
They then wanted access to all transactions, to charge each "client" with sales taxes, fees, fines, and "operating a business without a license" charges.
Nothing but crickets then.
A few fought, but you can't afford to win here.

I happen to live in NY state, and received a vehicle a while ago as a gift. I listed it as such on the form and paid no taxes. It had a KBB around $6k, don't know if it would be different if the value was listed higher.

Obviously YMMV (pun intended) but I just asked my wife this question because she spent 15 years of hell working for the Arkansas DMV. According to her, in AR there would be no sales tax to pay if you each filled out a Bill of Sale for $0 dollars. The Bill of Sale is the document that AR uses to charge sales tax. Good luck!

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